In one of our previous chats in 2018, you highlighted Neste’s NEXBTL technology which turns waste and residue into high quality products. Given Neste’s Singapore renewable-refinery now boasts a capacity of 2.6 million tonnes annually, equating to your previous global capacity, what is behind your ambitious expansion?
The expansion of our Singapore refinery marked a significant development, aligning with our major setups in Rotterdam. Over the past decade, this growth has positioned Neste as a world leader in renewable diesel production. in 2018-2019 ushered in a renewed commitment to our purpose, which is , "to create a healthier planet for our children." This reflects a broader generational aspiration to positively impact the environment through our business practices.
By 2030, we aim to enable our customers to reduce emissions by 20 million tonnes, a significant jump from the 7.9 million tonnes we managed in 2018 and most recently 11 million tonnes in 2023. This ambition is supported by our strategic expansions, including investment in a joint venture in Martinez, USA, and further developments in Rotterdam. These efforts underscore our confidence in meeting our environmental commitments by the targeted year.
Given the significant capacity increase, is there currently sufficient demand for Neste's sustainable aviation fuel?
Currently, Sustainable Aviation Fuel (SAF) supplies just 0.2% of the jet fuel demand, with projections to reach 1-2% by 2027. Although these figures fall short of the International Air Transport Association (IATA)'s net zero carbon emissions by 2050, they reflect a growing market potential. Our long-standing commitment to SAF research since the mid-1990s places us at the forefront of this emerging market, despite the initial lack of visibility and demand. The demand for SAF has been predominantly driven by Europe and the United States due to -their supportive regulatory environments. However, we are witnessing a growing interest from Asia-Pacific countries, with increasing commitments and mandates shaping the market. This emerging trend, supported by international aviation authorities and regional partnerships, points towards a gradual but inevitable shift towards more sustainable fuel options across the globe.
Apart from aviation, what other industries utilize renewable diesel?
Our renewable diesel, produced through Hydroprocessed Esters and Fatty Acids (HEFA) technology, offers a cleaner alternative to conventional diesel, with properties that allow unlimited blending with traditional fuels. This product has found significant use in the road transportation sector in Europe and North America, driven by regulatory mandates such as the European Union’s Renewable Energy Directive (RED) and similar North American policies, which have bolstered demand significantly.
Given the small size of Singapore, virtually all feedstock needs to be brought to the city state. How is feedstock sourced and transported to your refineries?
We source our feedstocks from more than 500 sustainability approved suppliers across 60 countries Our pre-treatment processes, such as bleaching, remove impurities before the feedstock enters our NEXBTL process for refining into renewable fuels and raw materials for polymers and chemicals. This global sourcing strategy ensures a steady supply chain to our refineries.
Our process involves hydro treatment, where we introduce hydrogen into oils to remove oxygen and alter the chemical structure. This is followed by isomerization to adjust properties such as the cloud and freezing points of the renewable fuels. Initially, our Singapore refinery used palm oil as a feedstock, which faced considerable environmental concerns. However, by 2023, we completely stopped using palm oil in our production and continued our focus using waste and residue oil and fat such as used cooking oil and animal fat wastes. The latter raw materials include inedible parts of animals which we convert into oil at our facilities.
How is Neste looking to move more downstream to directly target more of the chemicals market?
Neste has expanded into the business of Renewable Polymers and Chemicals, where one of our core products is renewable naphtha. This product is fed into downstream chemical companies to produce more sustainable polyethylene. This shift is part of a broader movement towards more sustainable industrial practices, which is essential for reducing reliance on fossil-based polymers. Our raw materials have been successfully used in applications such as medical, personal care, food & beverage and many more.
With the implementation of the carbon tax in Singapore, how has Neste adapted to this regulatory change?
The carbon tax represents a cost of doing business, similar to our operations in Finland and Rotterdam where the carbon tax is higher. However, it also aligns with our commitment to reducing our own emissions.
We have declared our goal to make all our production facilities globally carbon neutral by 2035 and have launched over 100 initiatives to achieve this.
Key measures include investing in wind power in Finland and large-scale electrolyzers in Rotterdam, and planning for green electricity in Singapore.
What are the next steps for Neste in becoming more sustainable and hitting your mission of creating a more sustainable planet?
Looking forward, digitalization will play a crucial role in enhancing our refinery operations. The introduction of Industry 4.0 technologies, such as real-time monitoring systems and wireless devices for safety and operational efficiency, are key. These technologies allow for continuous monitoring and support, improving both the safety and environmental impact of our operations. This approach not only enhances energy efficiency but also prepares our workforce for a future where digital skills are paramount.
